"The Times report was the latest in a series of damaging revelations..."

TRENTON, April 17Acting Gov.
Donald T. DiFrancesco denied today
that he had repeatedly violated legal-ethics
rules and had been threatened with dismissal
as the lawyer for his hometown government in
1998, and accused Democrats linked to
James E. McGreevey, that party's likely
gubernatorial candidate, of leaking material
about those allegations to The New York
Times.

But Mr. DiFrancesco's opponent in the Republican gubernatorial primary, Bret D.
Schundler, accused Mr. DiFrancesco of profiting from his public positions and said
Mr. DiFrancesco should quit the race.
And in a potentially troublesome sign for the acting governor, the Republican Party
chairman in Monmouth -- the county with the fourth-largest number of enrolled
Republicans -- said he was considering withdrawing his endorsement of Mr.
DiFrancesco and remaining neutral in the primary.

The Times reported that two special counsels in Mr. DiFrancesco's hometown,
Scotch Plains, one a Democrat and one a Republican, accused Mr. DiFrancesco in
1998 of repeated ethics violations in connection with a failed real estate transaction
by his relatives.

The lawyers concluded that Mr. DiFrancesco, as township attorney, had, among
other things, lobbied town officials to give relatives a zoning change they wanted,
while failing to disclose his own financial stake in the project's success; ruled on
other projects involving a major home builder shortly after receiving $225,000 from
the home builder to pay off a legal judgment against himself; and influenced town
officials to drop plans for a soccer field because his relatives held out hope of
developing the property where it would be built.

The Times report was the latest in a series of damaging revelations about Mr.
DiFrancesco, the State Senate president, who became acting governor on Feb. 1
and had been expected to enjoy a relatively easy contest for the Republican
nomination in June against Mr. Schundler, a staunch conservative.

Mr. DiFrancesco, a moderate, had been widely seen as a much more viable
candidate in the fall election, given New Jersey's historically moderate electorate.
But Mr. Schundler, the mayor of Jersey City, is now arguing that the accumulated
weight of all the negative publicity has made Mr. DiFrancesco unelectable against
Mr. McGreevey in November.

"I don't think that Don could even possibly win in the general election," Mr.
Schundler said at a news conference here today. "He can't even rally the Republican
votes."

Mr. Schundler argued that Mr. DiFrancesco had already been defined,
unflatteringly, in voters' eyes by news articles about his business, legal and real estate
interests. "All these things are opportunities to make a profit on the basis of a
position that you hold," he asserted. "Personal enrichment is not what government
should be about."

Mr. DiFrancesco's camp remained defiant today, although some supporters
appeared to be reeling. "There's a lot of panic out there," said one senior Republican
official.

Mr. DiFrancesco not only denied the allegations, but also played down their
potential to harm his candidacy. "People recognize this for what it is, a political
attack during a campaign season," he said at an appearance in Hackensack. "I
believe the Democrats are trying to make a big deal about it. It's designed to get me
to back off, to leave, to really hurt my chances of running for office."

But tonight there were signs that the revelations were having an impact: William F.
Dowd, the Monmouth County Republican chairman, who had earlier endorsed Mr.
DiFrancesco, said he was now considering remaining neutral in the primary. "I'm
polling people," he said. "It's really difficult for all of us."

The lack of an endorsement would mean that neither of the two gubernatorial
candidates' names would appear atop the so-called party line of endorsed
candidates on primary ballots in Monmouth County.

The new allegations against Mr. DiFrancesco also surfaced at an inopportune time
because of an oft- overlooked but critical deadline under New Jersey election law.
Mr. DiFrancesco filed his petitions as a candidate for governor last week. In doing
so, he took advantage of an option to name a committee of three supporters who,
should he abandon the race by a certain deadline, would be empowered to name
someone to take his place in the primary.

But that deadline is Wednesday, meaning that Mr. DiFrancesco would have to
make such a decision by then or his departure would leave the Republican Party
with no alternative to Mr. Schundler.

Mr. DiFrancesco, unbowed, insisted today that he was in the race to stay. And his
choice for chairman of the Republican State Committee, Joseph M. Kyrillos Jr., a
state senator from Monmouth County, speculated that few voters were even paying
attention to the campaign yet.

"The governor is running, he's running hard, and most people in New Jersey are just
tuning in to this primary race," he said. "The most political thing that most active
citizens did today was vote in the school board elections, not discuss the Republican
primary. And there are a bunch more weeks to come."

Mr. DiFrancesco asserted today that allies of Mr. McGreevey, the Woodbridge
mayor, who is unopposed for the Democratic nomination for governor, had leaked
the latest allegations about him.

"Mr. DiFrancesco's accusation is absolutely untrue," he said. "In fact, as the
accounts of his business and political deals have surfaced, we refrained from
attacking him head-on, and we repeatedly said, `He deserves the opportunity to
explain himself.' But if his idea of an explanation is to blame others, then he's not
taking responsibility for his own actions, and he's not displaying the qualities of
accountability and leadership New Jersey deserves in a governor."